The Top 10 Most Common Identity Theft Myths

by Neal O'Farrell on December 16th, 2013

Every year around this time we see the same experts dole out the same identity theft prevention tips. And yet, identity theft keeps getting worse. Maybe it’s because we have to take a step back, and start by exposing some of the myths that can lead to consumer apathy about identity theft. If we help consumers to better understand the reality of identity theft, they might better appreciate these tips and apply them more often.

So here goes:

Myth#1

“IDENTITY THEFT IS MORE HYPE THAN REAL”

Truth

Identity theft may be the single greatest crime epidemic in the history of America. According to research firm Javelin Strategy and Research, identity theft claimed an average of more than a million victims a month in 2012. The Department of Justice recently put the total number of victims at more than 16 million last year.

That means there were more victims of identity theft last year that there were burglaries, attempted burglaries, assaults, robberies, arsons, vehicles thefts, purse snatchings, pick pocketings, check fraud, and shoplifting combined.

Myth #2

“IDENTITY THEFT VICTIMS ARE NOT REALLY VICTIMS BECAUSE THEY GET THEIR MONEY BACK, SO IT’S NO BIG DEAL”

Truth

The biggest cost for victims of identity theft is the long term emotional harm. If a thief has your Social Security Number, or a grudge, as a victim you can be fighting for your identity for years. Victims often talk about the emotional harm being the worst – the worry, the harm to their credit, their lack of trust, their feelings of betrayal, wondering when the next shoe will drop, if it will impact their credit worthiness, their job, etc.

Myth #3

“ZERO LIABILITY MEANS I HAVE NOTHING TO LOSE EVEN IF I AM A VICTIM”

Truth

If you lose a small amount, say a few hundred dollars, your bank, credit union, or credit card company is likely to reimburse you. But if it’s more than that, or you can’t explain how the money was removed from your bank account, banks will often either deny your claim outright or tell you they will need to launch an investigation – which can take months.

And you may be in even bigger trouble if your debit card is copied through skimming. The thieves will have your card and pin, without your knowledge, and banks will often us that as an excuse to blame you, the victim.

Myth #4

“I FROZE MY CREDIT SO MY IDENTITY IS SAFE.”

Truth

A freeze is helpful but only protects against new account creation. It doesn’t stop a thief misusing an existing account or credit card, prevent skimming, emptying a bank account, check fraud, using your identity to file fraudulent tax refunds, Social Security fraud, employment fraud and many other types of identity theft. And in a troubling trend, identity thieves are turning to payday lenders as a way to get around freezes, fraud alerts, and monitoring, because payday lenders often don’t run credit checks.

Myth #5

“I SHOULD BE MORE WORRIED ABOUT MORE COMMON CRIMES LIKE BURGLARY, PURSE SNATCHINGS AND PICK POCKETS”

Truth

You are 6 more times more likely to be a victim of identity theft than burglary, and 500 times more likely to be a victim of identity theft than purse snatching.

Myth#6

“I CAN JUST GET A POLICE REPORT TO PROVE I’M A VICTIM.”

Truth

A police report is vital if you need to defend yourself against claims from debt collectors or victimized businesses. But they’re not always easy to get, in spite of the fact the victims are entitled by Federal law to a police report.

Common excuses victims receive when they try to file a police report are “You need to file the report in the jurisdiction where the crime was committed” and “You’ll need hard evidence before a police report can be filed.” Neither are true but you may still have to be patient when trying to get a police report.

Myth #7

“I TEND TO SHOP ON SMALL BUSINESS WEBSITES BECAUSE THEY’RE TOO SMALL FOR HACKERS.”

Truth

Most security experts believe that small businesses are now the number one target for hackers, mainly because of lax security. Web security firm SiteLock reports finding up to 5,000 new small business websites every single day that have already been comprised with malware waiting to infect visitors and shoppers.

Myth #8

“I USUALLY USE A DEBIT CARD BECAUSE IT’S MUCH SAFER.”

Truth

A credit card is a much safer bet that a debit card. A debit card connects directly to your bank account. If it’s compromised, the thief is stealing your money. If your credit card is compromised, the thief is stealing the bank’s money. Which would you prefer?

Myth #9

I HAVE GOOD ANTIVIRUS SOFTWARE THAT’S ALWAYS UPDATED, SO I DON’T HAVE TO WORRY ABOUT CYBER THREATS.”

Truth

Antivirus software is very important but it’s only one layer of protection. A study by the University of Alabama found that most of the popular antivirus programs in use today only catch about 25% of malware. A test in December 2013 by security firm OPSWAT found that out of 44 of the most popular antivirus products on the market, only one could detect a keylogger.

Myth #10

“I GUARD MY PERSONAL DATA BETTER THAN FORT KNOX “

Truth

It’s not you, it’s them. No matter how well you guard your personal information, others will betray you. For example, there has been an average of one reported data breach in the U.S. every single day for the last five years, exposing more than 500 million personal records. Up to 80% of those records may have included Social Security Numbers. Could yours have been one of them?